The 2008-2009 financial crisis that rocked worldwide markets was amplified by the lack of a sufficient regulatory framework, including checks on the largest broker-dealer firms, Federal Reserve Board chairman Ben Bernanke said Friday.

Reflecting on the government response to the financial panic, Bernanke told listeners in New York that the global financial framework contained key vulnerabilities before the crisis, particularly with regard to the “shadow banking” sector of the market.

“As became apparent during the crisis, a key vulnerability of the system was the heavy reliance of the shadow banking sector, as well as some of the largest global banks, on various forms of short-term wholesale funding, including commercial paper, repos, securities lending transactions, and interbank loans,” Bernanke said.

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